Community Health notes lead lackluster day; Frontier dominant as it continues positive trend in trading

By James McCandless

San Antonio, March 20 – The distressed debt market experienced a low volume day Tuesday, traders said, with very little making new waves.

Community Health Systems, Inc. notes continued to be the talk of the trading session. The company announced last week that it had hired three firms to come up with a strategy to reduce its debt.

Issues in Frontier Communications Corp. remained a volume favorite, piggybacking off of a string of positive news and new issues.

Claire’s Stores, Inc. paper continued to trade. On Monday, the company announced that it had reached a restructuring deal with its creditors as part of a bankruptcy filing.

Intelsat SA remained another volume favorite in the distressed telecom sector. Mallinckrodt plc also contributed volume in the healthcare space. Northern Oil and Gas Inc. and Ensco plc were active in distressed energy amid a positive day for oil futures.

Community Health rolls on

Franklin, Tenn.-based hospital operator Community Health Systems continued its streak of activity on Tuesday, market sources confirmed. Last week, the company announced that it had hired asset management firm Lazard, Citibank and JPMorgan Chase to help manage its debt. The company has already cautioned stakeholders about its debt issue, alluding to a potential sell off of hospitals in the coming year.

The 7 1/8% notes due 2020 fell about ¾ point to close around 79¾ bid. The 6 7/8% notes due 2022 shaved off ¼ point to close at 58 bid.

Frontier dominates volume

Issues in Norwalk, Conn.-based wireline telecom name Frontier Communications, always a distressed favorite, has seen increased activity of late after a string of news, traders confirmed. The company has been seen in a positive light as of late for scrapping its quarterly dividend to focus on paying down debt.

“Their issues trade every day,” a trader said. “And people are starting to think they can weather the storm.”

The 7 5/8% issues due 2024 trended lower but remained around the 59¾ bid level. The 10½% notes due 2022 rose ¾ point to close at 87½ bid. The 11% notes due 2025 gained ½ point to close at 80¾ bid.

Claire’s sinks again

Hoffman Estates, Ill.-based retailer Claire’s notes took another tumble Tuesday, a market source said. On Monday, the company took the long expected action of filing for bankruptcy after reaching a restructuring deal with its creditors.

The 8 7/8% paper due 2019 fell about 3¼ points to close at 9 bid.

Volume names trade

Another telecom favorite was Luxembourg-based satellite communications company Intelsat. Its notes have received positive attention since FCC chairman Ajit Pai made comments about the future of the U.S. 5G network that some market sources think could benefit satellite firms.

The Intelsat Jackson SA 5½% notes due 2023 lost about ¼ point to close at 80½ bid. The 7¼% notes due 2020 gained about 1 point to close just below 93¼ bid.

After completing a $1.2 billion acquisition and gaining a foothold in the North American market, Britain-based drug maker Mallinckrodt has been heavily traded in the distressed healthcare sector.

The 4¾% issues due 2023 fell by about 1 point to close just under 78¼ bid.

Oil futures recovered some of its recent losses Tuesday amid movement in some distressed energy names.

Minnetonka, Minn.-based independent oil and gas name Northern Oil and Gas saw its 8% paper due 2020 jump up about 1¾ points to close at 95 bid, its highest year-to-date level.

Britain based oil driller Ensco’s 5 ¾% bonds due 2044 gained ½ point to close at 67 bid.

“Today was slower than slow,” a trader said. “There’s just a lot of people sitting on their hands right now.”

© 2015 Prospect News.
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